The World Bank must stop support for coal in Indonesia: Springs Meetings must lead to firm commitments
Press release – April 17, 2015
April 15, 2015 ? Activists are calling on the World Bank to heed its own advice and follow a clear pathway to low-carbon development ? starting with its own energy sector operations. While the Bank has ruled out direct support for coal plants in all but the poorest countries of the world, indirectly it continues to provide support for at least three massive coal plants in Indonesia.
“The World Bank continues to support the Indonesia Infrastructure Guarantee Fund which is providing crucial guarantees to the controversial 2000 MW Batang coal plant in Central Java and two coal plants in South Sumatra. This is unacceptable. If the World Bank is serious about low carbon development, it must immediately ensure that none of its funds are being used to either directly or indirectly support the development of high carbon infrastructure such as coal plants.” said Arif Fiyanto, Climate and Energy Campaign Team Leader.
This week in Washington, DC the Spring Meetings of the World Bank will bring together thousands of government officials, civil society organizations, journalists and private sector representatives to debate the institutions’ work and implications for international development. With the United Nations’ climate negotiations set to conclude a global agreement in Paris this December, it is a critical time for the Bank to put forward ambitious and concrete commitments on how the World Bank will lead the world onto a low-carbon development path.
Through four World Bank infrastructure policy lending operations worth $850 million, Indonesia established the Indonesia Infrastructure Guarantee Fund(IIGF) and the 2012 Land Acquisition Law to support a development model based on public-private partnerships (PPP). The IIGF provided its first government guarantee of $34 million to the Central Java coal power megaplant of Batang.
Currently, the World Bank has a direct $30 million loan to the IIGF which, according to the Bank, involves “a platform for ongoing engagement in the development and appraisal of PPP infrastructure operations” seeking IIGF guarantees. As part of this commitment, IIGF projects are supposed to adhere to the World Bank’s own Social and Environmental Safeguards.
“For nearly four years, thousands of Batang residents have struggled against the development of the Batang coal power megaplant to protect their rich agricultural land fishing grounds, and their livelihoods,” said Arif Fiyanto. “They have been constantly threatened and attacked by thugs, police, army, and government agents. The project is clearly in violation of the Bank’s safeguard policies yet the Bank has refused to step in and prevent IIGF support for the project,” he said.
Villagers’ continued refusal to sell their land for the proposed coal plant has forced the Indonesian government to extend the deadline for financial closure of the project for three consecutive years. In violation of Presidential Regulation No. 66 of 2013, the government has refused to cancel the project and instead is threatening to exercise a clause in the World Bank-supported 2012 Land Acquisition Law to compulsorily acquire remaining lands. Nor did troubles with Batang cause the World Bank to stop IIGF from approving further government guarantees for two new coal power plants in February 2015 in South Sumatra ? Sumsel 9 and 10.
“It is vital to underscore that the IIGF has not provided any government guarantees to clean renewable energy infrastructure projects,” said Heike Mainhardt, an expert on World Bank support for coal. “This is all the more shocking considering Indonesia’s vast and largely untapped potential for geothermal, solar, and other renewable energies. President Kim specifically called on countries to end harmful subsidies to fossil fuels, yet the World Bank is still creating new subsidies to fossil fuels through government guarantees and tax breaks for infrastructure investments. This must end.”
Arif Fiyanto, Climate & Energy Campaign Team Leader Greenpeace SEA Indonesia, +62 8111805373
Rahma Shofiana, Media Campaigners Greenpeace Indonesia, +62 8111461674
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